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How To Handle Finances for Elderly Parents

Finances | February 1, 2023

An adult caregiver going over a checklist for taking over his parents’ finances.

There are a lot of responsibilities that our parents managed when we were children. Growing up, our moms and dads were in charge of all the financial decisions as we learned to count. These people helped raise us, which is why it’s so important for us to step in and support our parents when they aren’t able to make the same clear-minded decisions as before.

Over time, our parents will likely need some help managing day-to-day financial affairs. Some of them may need some simple assistance with long-term planning, while others may need someone to oversee all their finances due to Alzheimer’s or other reasons. Either way, acting as a caregiver is a big responsibility and it’s not always clear what to do.

Fortunately, you don’t have to take on these financial responsibilities alone. We’ve put together some steps you can take to handle your parent’s finances as they get older.

How to Help Your Aging Parents with Finances

The first step to helping your parents with their finances is to talk with them first. It’s not always easy talking money management with your parents, which is why we put together a breakdown on how to talk to them about financial help. Once your parents accept your help, it’s time to start taking over their finances.

Throughout this process, you’ll want to document what you’ve done and what you plan to do. It takes a lot of work to handle finances for elderly parents, but that doesn’t mean you have to do it alone. Communicate these steps with your parents and other family members so that they can support you and ensure everyone is on the same page.

It’s also key to make gradual changes when possible. If your parents only need help in certain areas, slowly take on those responsibilities to give both you and them time to become more comfortable with this new role. When your parents can no longer handle financial responsibilities, prioritize the most important tasks and use the following checklist for taking over parents’ finances one step at a time.

Make a list of your parents’ accounts

A great first step is to create a comprehensive list of any financial accounts and responsibilities your parents have. These include:

  • Debit and credit card accounts
  • Mortgage or rental payments
  • Medicare, Medicaid, Social Security, and other government benefits
  • Household utilities
  • Investments
  • Loans, and other long-term payment plans
  • Taxes

Once you have a thorough list, collect any statements and documents for these accounts. This information will help you keep track of any outgoing or incoming funds and what financial responsibilities you may have to manage for your parents.

Set up a payment schedule

Now that you have a full list of regular expenditures, you’ll want to create a regular payment schedule to stay on top of every bill. This schedule can come in many forms – a physical calendar, automated bill pay, etc. The key is that your schedule makes it easier for you and your parents to submit payments on time for every account and responsibility.

Gather documents and personal information

There are several personal and legal documents that your parents will likely need as they grow older. The problem is that some people do a better job keeping these organized than others. As such, you’ll want to locate the following documents:

  • Power of attorney
  • Birth certificates and social security card
  • Driver’s license
  • Passport
  • Marriage and divorce papers
  • Property deeds
  • Will, estate plan, or trust
  • Portable medical order
  • Insurance policies and cards
  • Bank and financial account details and terms
  • Vehicle titles
  • Retirement accounts
  • Username and passwords for online accounts
  • Emergency information sheet
  • Any contents of a safe deposit box

Make a checklist of every document you have and note where each is stored. Items like driver’s licenses should be readily accessible if your parents still need them for regular use. Other important documents should be stored in a box or master folder and kept in a secure place.

Determine whether their legal documents require updates.

As you review various financial documents, there’s a solid chance that some will be a little out of date. Review documents like wills or any items with expiration dates to see if it’s time to update anything in the near future. You can also take note of any documents that will need updates in the future and add them to your payment schedule or another calendar to stay on top of everything.

Review investments, loans, and other accounts

It’s always good to get a second set of eyes on your parent’s accounts, especially if nobody has checked them in a while. Double-check different investment plans, loan terms, and other details to see if there are any short-term opportunities for improvement or if a new approach would be best. For example, is their current residence the most economical option? Look at everything with a critical eye to justify certain expenses and adjust as necessary.

Consider professional help

Taking care of your family doesn’t mean you can’t find help outside of the family. There are plenty of professionals who can help you handle financial decisions for elderly parents. Whether you don’t feel comfortable making investment decisions or need someone to help you, professionals like financial planners, attorneys, and advisers can provide expert assistance with these important responsibilities.

Become their guardian if necessary

While some parents are fine with some unofficial support, others may be in a position where you need to make decisions on their behalf. Parents who can’t or don’t want to make financial decisions can name you as their fiduciary. This role lets you make these crucial decisions on your mom or dad’s behalf through one of the following processes.

  • Power of attorney – If your parent is of sound mind, they can grant you their guardian. You can also petition for guardianship, although each state has its own requirements and process.
  • Trustee – Parents can transfer their assets into a special trust and name you a trustee where you can make financial decisions about those assets.
  • Court-appointed guardians – A court can name you as guardian if it finds that your parent can’t manage their assets on their own. In this role, you must act in your parent’s best interest and report your financial decisions to the court.
  • Government fiduciaries – Specific government agencies can appoint you as a fiduciary to handle specific decisions. For example, the Social Security Administration might appoint you as fiduciary to manage your parents’ monthly checks.

Help Your Parents Plan for the Future

With a little planning and kindness, you can help your parents navigate the financial complexities of their senior years. Of course, it’s not always easy to play the role of caregiver. Trying to determine the right senior living solution? National Church Residences takes an individual approach to support seniors and help them live a healthier, more satisfying lifestyle. Find out which senior living options are in your area or give us a call at 844-465-6063 to talk to one of our friendly staff members today.

 

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